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House prices spark in busiest start to the year

UK house prices continued to rise in January, marking the busiest start to the year on record, an industry survey showed on Monday.

According to the latest Rightmove House Price Index, the average price of property coming to market rose by 0.3% in January from December, to £341,019. That is 7.6% higher than January 2021, and the highest annual rate of price growth recorded by Rightmove since May 2016.

Rightmove said it was the busiest ever start to a new year, driven by ongoing strong demand and weak supply. Buyer enquiries surged by 15% year-on-year, while the number of available homes for sale per estate agency branch dropped to just 12.

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First-time buyer asking prices hit £214,174, a month-on-month jump of 1.4% and a fresh record. House prices are now 6.8% up on January 2021.

Tim Bannister, director of property data at Rightmove, said: “New Year sellers and buyers have been quick off the mark this year, with Rightmove recording the highest ever number of Boxing Day sellers coming to market.

“These early-bird sellers who got themselves ready to come to market are now benefiting from the busiest start to the year that we’ve recorded.

“All the signs suggest that prices are likely to continue to rise until more choice is available.

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“It is clear that the trends which defined the market in 2021 have carried over into this year.”

However, looking ahead, Bannister said there were “early signs” of a better balanced market in 2022. The number of requests from would-be sellers to agents increased in January, and was at one of the highest points ever on the first working day of the year.

“While this potential new supply will take a little while to appear on the market, it’s an encouraging sign of more choice for buyers in the coming months,” he noted.

The index is compiled from asking prices of properties coming to market via more than 13,000 estate agency branches that list on Rightmove.

By Abigail Townsend

Source: Sharecast News

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UK house prices hit another record high in December 2021

Average UK house prices rose 9.8% in 2021, resulting in a record high of £276,091 in December, according to the Halifax House Price Index.

House prices increased by over £24,500 in 2021, the largest annual cash rise since March 2003, but Halifax said this growth is likely to slow over the next year.

At 1.1%, the monthly rate of changed remained in line with November, but saw a slight drop from the 1.7% high seen month-on-month in September.

With only a slight dip of 0.6% in June, 2021 saw UK average house prices increase every month.

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Wales remained the strongest performing nation or region, with annual price inflation of 14.5%, taking the average house price to £205,579.

However, this was a slight decrease from the 14.8% rise recorded in Wales in November.

Northern Ireland was also one of the strongest performing regions, recording annual growth of 10.6%, and an average house price of £170,946.

House prices also continued to rise in Scotland, with the average property up 9.7% year-on-year, and the average price standing at £192,988 in December 2021, the most expensive on record.

In England, the North West was the strongest performing region (11.8%), followed by the South West (11.0%).

Despite registering a strong quarterly rise in prices (2.9%), up from 1.1% in November, London was still the weakest performing for annual inflation (2.1%).

Russell Galley, managing director at Halifax, said: “The housing market defied expectations in 2021, with quarterly growth reaching 3.5% in December, a level not seen since November 2006.

“In 2021 we saw the average house price reach new record highs on eight occasions, despite the UK being subject to ‘lockdown’ for much of the first six months of the year.

“The lack of spending opportunities afforded to people while restrictions were in place helped boost household cash reserves.

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“This factor, alongside the stamp duty holiday and the race for space as a result of home working, will have encouraged buyers to bring forward home purchases that may have been planned for this year.

“The extension of the government’s job and income support schemes also supported the labour market, and may have given some households the confidence to proceed with purchases.

“A lack of available homes for sale, and historically low mortgage rates, have also helped drive annual house price inflation to 9.8%, its highest level since July 2007.

“Looking ahead, the prospect that interest rates may rise further this year to tackle rising inflation, and increasing pressures on household budgets, suggests house price growth will slow considerably.

“Our expectation is that house prices will maintain their current strong levels but that growth relative to the last two years will be at a slower pace.

“However, there are many variables which could push house prices either way, depending on how the pandemic continues to impact the economic environment.”

Chris Hutchinson said: “A new year has begun with a similar story to the last, as house prices continue to rise.

“While there are still attractive low-deposit deals for first-time buyers, the increasing cost of living is causing ever more difficulty for potential homeowners to raise the funds necessary for a deposit and be in a strong position to pass the required affordability checks for a mortgage.

“Encouraging positive financial habits should be of paramount importance to the government and the housing industry from the moment people begin their renting journey.

“With competition in the market so high, having an edge will prove to be key for potential homeowners when looking to secure an affordable mortgage, therefore, building a strong credit score and financial resilience should be at the top of the list for all whose end goal is homeownership.”

Karen Noye added: “The 2021 property market was somewhat of a whirlwind, with prices consistently being pushed higher due to the stamp duty holiday, a race for space driven by home working and demand outweighing supply.

“While a continued rise in house prices in December is perhaps not what many will have been hoping for, we may finally see growth slow in 2022.

“With the Bank of England’s interest rate rise firmly in place, and with further increases hotly anticipated, we may finally see a slowdown in surging prices.

“Alongside the highly inflated housing market, mortgage rates have been pushed up and we will likely see further rises if the BoE increases rates again as expected.

“While there appear to be some positive signs in terms of the impact of the Omicron variant, it serves as a reminder of the uncertainty we still face in this pandemic.

“Increased mortgage costs and the threat of possible future restrictions may put homebuyers off, and we could see a break in house price growth as a result.

“However, as demand seemingly continues to outweigh supply, any fall in price growth is likely to be gradual.”

Gareth Lewis said: “Prices are still increasing but transactional flow has slowed a little, along with price growth.

“It will be interesting to see the housing market return to a level of normality over the next few months, without the government stimulation in the form of the stamp duty holiday which fuelled much of last year’s activity.

“Business has been buoyant as we start the year, with plenty of enquiries coming through.

“January can be quite a slow month as people gradually get back to work and find their feet but there are still motivated buyers who didn’t transact last year and are keen to do so, particularly before interest rates rise further.”

By Jessica Bird

Source: Mortgage Introducer

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UK house prices accelerate at fastest pace since before financial crisis

UK house prices have accelerated at their fastest pace since before the financial crisis, shooting up over 10 per cent over the last year, reveal fresh figures released today.

The cost of buying a home in Britain hit £254,822 this month, the highest price on record and up around £24,000 since December last year, according to building society Nationwide.

House prices have taken off this year driven by a combination of a relief on taxes paid on property sales, prospective homeowners rushing to snap up larger homes with access to green space and a record low interest rate environment.

Chancellor Rishi Sunak raised the threshold at which stamp duty is paid on property sales to £500,000 in July last year.

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The tax break was watered down to £250,000 up until the end of September this year. It reverted to its normal £125,000 level at the end of the month.

However, demand in the property market has remained strong despite the relief being pulled.

Robert Gardner, Nationwide’s Chief Economist, said: “Demand has remained strong in recent months, despite the end of the stamp duty holiday at the end of September.”

“Mortgage approvals for house purchase have continued to run above pre-pandemic levels, despite the surge in activity seen earlier in the year,” he added.

The pandemic triggered mass take up of remote working practices, severing workers’ ties to physical offices, igniting strong demand for homes outside cities in the process.

Research published today by bank Halifax found that house prices in towns such as Taunton and Newark have risen more than treble the national average.

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However, Nationwide warned the property market is likely to cool in the coming year.

“It appears likely that the housing market will slow next year, since the stamp duty holiday encouraged many to bring forward their house purchase in order to avoid additional tax,” Gardener added.

“The Omicron variant could reinforce the slowdown if it leads to a weaker labour market.”

There are also concerns soaring home prices has choked affordability in the market, causing buyers to take on high levels of debt to fund purchases.

Habito, an online lender, is launching mortgages that are up to seven times a person’s salary, the first time the mortgage to salary multiple has reached this level since Northern Rock was nationalised in 2008.

Higher interest rates will likely deter prospective buyers with lower deposits from pushing ahead with home purchases.

The Bank of England this month hiked rates for the first time in over three years, lifting them 15 basis points from a record low 0.1 per cent.

By JACK BARNETT

Source: City AM

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Average UK house price ends year at record £254,822

The average UK house price rose by nearly £24,000 during 2021, the biggest increase ever recorded in a single year in cash terms, according to an index.

The typical price of a home reached a record high of £254,822 in December, marking a £23,902 increase over the past year, Nationwide Building Society said.

Chief economist Robert Gardner said: “The price of a typical UK home is now at a record high of £254,822, up £23,902 over the year – the largest rise we’ve seen in a single year in cash terms.

“Prices are now 16% higher than before the pandemic struck in early 2020.”

Nationwide said house prices were 10.4% higher annually and 1.0% higher month on month in December.

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Looking at what has been behind the price increases, Mr Gardner said demand for homes has remained strong despite the ending of the stamp duty holiday this year.

He said: “Mortgage approvals for house purchase have continued to run above pre-pandemic levels, despite the surge in activity seen earlier in the year. Indeed, in the first 11 months of 2021 the total number of property transactions was almost 30% higher than over the same period of 2019.

“At the same time, the stock of homes on the market has remained extremely low throughout the year, which has contributed to the robust pace of price growth.”

Mr Gardner said the outlook for the housing market “remains extremely uncertain”.

He continued: “The strength of the market surprised in 2021 and could do so again in the year ahead.

“The market still has significant momentum and shifts in housing preferences as a result of the pandemic could continue to support activity and price growth.”

Nationwide also published quarterly figures showing house price trends in the UK’s nations and regions of England.

It said Wales ended the year as the strongest performer, with house prices there up by 15.8% year on year.

Mr Gardner said it is the first time in the history of the regional series (which started in 1973) that Wales has ended the year as the top performer.

He said annual house price growth in Northern Ireland, at 12.1%, was the strongest end to the year it has had since 2007.

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Annual house price growth in Scotland was 10.1%, in line with the UK generally, Mr Gardner added.

He said: “England saw a slight increase in annual price growth to 9.0%, from 8.5% in the third quarter…

“The South West was the strongest performing English region, with annual price growth of 11.5%, the largest calendar year increase in the region since 2004.”

Karen Noye said: “As we move into 2022 – and away from the whirlwind property market seen throughout 2021 – we are likely to see a slowdown in property prices and transactions, particularly if the Bank of England further increases interest rates.

“While we may see the property market slow, this does not mean buying a home will become instantly more affordable. Alongside the already inflated housing market, mortgage rates have increased following the Bank of England’s rate rise, and as inflation does not appear to be slowing, costs will likely continue to rise.

“Increased mortgage costs coupled with the uncertainty surrounding the Omicron variant could well make people think twice about moving home and we could see a break in house price growth as a result. However, supply versus demand issues persist, so we are likely to see a gradual slowing of growth as we head into 2022 as opposed to a sharp drop.”

Mark Harris said: “Although the last month of the year tends to be quieter for the market as people wind down for Christmas, there was still plenty of interest in buying homes and more demand than supply pushed house prices up further still.”

Gareth Lewis said: “Although many people have made their move, there is still plenty of pent-up demand, which will keep property prices high.”

Here are average house prices in the fourth quarter of 2021, followed by the annual increase in cash and percentage terms, according to Nationwide Building Society:

– Wales, £196,759, £26,913, 15.8%

– Northern Ireland, £167,479, £18,096, 12.1%

– South West, £294,845, £30,333, 11.5%

– Outer South East (includes Ashford, Basingstoke and Deane, Bedford, Braintree, Brighton and Hove, Canterbury, Colchester, Dover, Hastings, Lewes, Fareham, Isle of Wight, Maldon, Milton Keynes, New Forest, Oxford, Portsmouth, Southampton, Swale, Tendring, Thanet, Uttlesford, Winchester, Worthing), £329,869, £33,579, 11.3%

– North West, £196,806, £19,882, 11.2%

– Yorkshire and the Humber, £190,855, £18,530, 10.8%

– East Anglia, £268,146, £25,342, 10.4%

– East Midlands, £221,813, £20,861, 10.4%

– Scotland, £172,605, £15,836, 10.1%

– West Midlands, £227,031, £19,428, 9.4%

– Outer Metropolitan (includes St Albans, Stevenage, Watford, Luton, Maidstone, Reading, Rochford, Rushmoor, Sevenoaks, Slough, Southend-on-Sea, Elmbridge, Epsom and Ewell, Guildford, Mole Valley, Reigate & Banstead, Runnymede, Spelthorne, Waverley, Woking, Tunbridge Wells, Windsor and Maidenhead, Wokingham), £410,992, £33,316, 8.8%

– North East, £148,105, £10,574, 7.7%

– London, £507,230, £20,668, 4.2%

Source: Shropshire Star

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UK house prices soar again, fuelled by dearth of sellers: RICS

House price inflation in Britain picked up last month, propelled by a shortage of sellers that suggested further price rises lie ahead, a closely watched survey showed on Thursday.

The Royal Institution of Chartered Surveyors said a net balance of 70% of its members reported an increase in house prices last month, up from a revised 69% in September.

A Reuters poll of economists had pointed to a reading of 65%.

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The October survey showed the first increase in the house price balance since May.

Other surveys have also pointed to continued house price growth since July when a year-long exemption from the stamp duty tax on house purchases was halved in scale in England and Northern Ireland and expired altogether in Wales.

Scotland ended the incentive in April and it expired in its entirety in England and Northern Ireland at the end of September.

RICS Chief Economist Simon Rubinsohn said expectations of higher Bank of England interest rates were a sideshow to the lack of supply of homes coming to the market.

Last week the BoE refrained from raising rates at its November policy decision, against the expectations of many investors, but top officials at the central bank have said borrowing costs are likely to go up soon.

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“The inventory on agents’ books appears to have slipped back towards historic lows and this seems to be underpinning both the current price trend and expectations for the next year,” Rubinsohn said.

“Meanwhile although there is likely to be some drop in activity in the immediate aftermath of the expiry of the stamp duty break, most activity indicators currently remain solid. Indeed, the main challenge for buyers looking forward may once again be a lack of choice of property on the market.”

More than two-thirds of surveyors said they expected house prices to continue rising over the next 12 months, the survey showed.

Source: Investing

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UK house prices hit new highs with typical home topping £250k

House prices have hit record highs, with the average property hiking more than £30k since the pandemic struck.

Nationwide’s House Price Index was published against a backdrop of the Bank of England being anticipated to raise interest rates in response to rising inflation.

The typical UK home has topped a quarter of a million pounds for the first time.

The lender has reported that the price of the average house rose by 0.7 per cent in October, up from 0.2 per cent in September.

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The annual growth rate remained elevated at 9.9 per cent in October, slightly lower than 10 per cent in September.

Demand had remained strong, despite the end of the stamp duty holiday at the end of September.

There were 72,645 mortgage applications in September, more than 10 per cent above the monthly average recorded in 2019.

“Combined with a lack of homes on the market, this helps to explain why price growth has remained robust,” Robert Gardner, Nationwide’s chief economist, said.

The outlook was “extremely uncertain,” as a sharp increase in the cost of living had slowed consumer confidence, Gardner added.

“Even if wider economic conditions continue to improve, rising interest rates may exert a cooling influence on the market, though the impact on existing borrowers is likely to be modest,” he added.

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The economist said a 0.4 percentage point interest rate increase in rates to 0.5 per cent “is likely to have a modest impact on most borrowers who are on variable rates”.

“For example, on the average mortgage, an interest rate increase of 0.4 per cent would raise monthly payments by £28 to £625 (or around £335 extra per year), though a rise of bank rate to 1 per cent would see typical payments go up by a more substantial £64 to £660 (more than £760 per year approximately).”

He added: “It’s important to note that a small proportion of households already have a relatively high debt service burden.

Jonathan Hopper, CEO of Garrington Property Finders said the market still showed no signs of slowing:

“A boom that many predicted would burn itself out is still in full flow despite the end of the stamp duty holiday.

“While on the front line we’re seeing some asking prices being reduced as the market begins to normalise, monthly price growth in October actually accelerated, doing the exact opposite of what might have been expected after the end of the Chancellor’s tax incentives.

He added: “The white heat of price inflation seen for much of this year is still creating sleepless nights in Threadneedle Street.”

By Emily Hawkins

Source: City AM

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Housing market ‘set to record its strongest year since 2007’

The housing market is set to record its highest level of sales this year since 2007, according to a property website.

Around 1.5 million sales will have taken place across the UK in 2021, Zoopla predicts.

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It added that housing transactions are expected to decline to 1.2 million in 2022, in line with the long-run average, but still relatively high compared to the past decade.

The impact of the pandemic on the housing market has further to run but at a less frenetic pace

Richard Donnell, Zoopla

Richard Donnell, from Zoopla, said: “2021 is set to be a record year for the housing market with the most moves by homeowners since 2007 and nearly £500 billion of home sales.

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“The impact of the pandemic on the housing market has further to run but at a less frenetic pace.

“We expect the momentum in the market to outweigh some emerging headwinds from higher living costs and the risk of higher mortgage rates.

“The latest data shows a turning point in the rate of house price growth, which we expect to slow quickly with average UK house prices up 3% by the end of 2022.”

Source: Shropshire Star

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Halifax: House prices reach record high

UK house prices rose by 1.7% in September, equating to an increase of £4,400 to the value of the average property, according to the latest Halifax House Price Index.

This means that UK house prices are now at a record high of £267,500.

This month-on-month rise is the strongest increase since February 2007 and ups year-on-year house price inflation up to 7.4%.

This also reversed the recent three-month downward trend in annual growth, which had peaked at an annual rate of 9.6% in May.

Wales continued to record the strongest house price inflation of any UK region or nation, with annual growth of 11.5% in September (average house price of £194,286).

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Scotland also continues to outperform the UK national average, with growth of 8.3% (average house price of £188,525).

In both nations, the equivalent stamp duty holidays came to an end at an earlier date.

The South West remained the strongest performing region in England, with annual house price growth of 9.7% (average house price of £276,226).

The North West saw the next biggest increase, with house prices up by 9% year-on-year (average house price of £201,927), marginally ahead of Yorkshire and Humber at 8.9% (average house price of £186,815).

The weakest performing regions in terms of annual house price inflation are all to be found in the South and East of England, though these are also the areas with the highest average UK house prices.

Eastern England has seen annual growth of 7.2% (average house price of £310,664) while in the South East it is 7% (average house price of £360,795).

Greater London remains the outlier, with annual growth of just 1% (average house price of £510,515), and was again the only region or nation to record a fall in house prices over the latest rolling three-monthly period (0.1%).

Russell Galley, managing director of Halifax, said: “While the end of the stamp duty holiday in England – and a desire amongst homebuyers to close deals at speed – may have played some part in these figures, it’s important to remember that most mortgages agreed in September would not have completed before the tax break expired.

“This shows that multiple factors have played a significant role in house price developments during the pandemic.

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“The ‘race-for-space’ as people changed their preferences and lifestyle choices undoubtedly had a major impact.

“Looking at price changes over the past year, prices for flats are up just 6.1%, compared to 8.9% for semi-detached properties and 8.8% for detached.

“This translates into cash increases for detached properties of nearly £41,000 compared to just £6,640 for flats.

“Against a backdrop of rising pressures on the cost of living and impending increases in taxes, demand might be expected to soften in the months ahead, with some industry measures already indicating lower levels of buyer activity.

“Nevertheless, low borrowing costs and improving labour market prospects for those already in employment are likely to continue to provide support.

“Perhaps the biggest factor in determining the future of house prices remains the limited supply of available properties.

“With estate agents reporting a further reduction in the number of houses for sale, this is likely to underpin average prices – though not the recent rate of price growth – into next year.”

Mike Scott, chief analyst at Yopa, added: “The Halifax House Price Index for September shows that there was a large monthly increase in house prices as we reached the final end of the stamp duty holiday, with average prices up by 1.7% for the month and the annual rate of increase rising to 7.4%.

“The mortgage approvals included in the September figure largely relate to purchases that will complete in later months and not benefit from any tax saving, so this is in effect already a post-tax-holiday figure.

“It is therefore further evidence that the withdrawal of the tax savings will have little effect on the over-heated housing market, which is still being driven by a severe shortage of homes for sale, good mortgage availability at record low interest rates, strong wage growth, pandemic-induced lifestyle changes and the involuntary savings built up by many during the lockdowns.

“Yopa thus expects the current strong rate of price growth to be maintained into at least the first half of 2022 as we continue to recover from the pandemic and return to a new normal.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Although reflecting some historical buying and selling, the housing market continues to demonstrate remarkable resilience bearing in mind the number of transactions brought forward in the last few months to take advantage of the stamp duty holiday.

“Nevertheless, we are finding activity has lost some oomph but there is still plenty of life left, supported by record low interest rates and supply, while though rising, is not doing so fast enough.

“The market also seems to be shrugging off rising inflation and the end of furlough, as well as widening economic concerns.”

August saw the average cost of a property reach £262,954, up 0.7% on July and the then highest figure on record.

By Jake Carter

Source: Mortgage Introducer

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UK house prices keep rising even as tax break unwinds: RICS

A lack of new homes for sale in Britain boosted prices again last month even as the housing market slowed following a partial withdrawal of a pandemic emergency tax break for property purchases, a survey showed on Thursday.

The Royal Institution of Chartered Surveyors’ (RICS) gauge of new buyer enquiries slipped in August to its lowest level since January, as did its measure of agreed sales.

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But with demand still far in excess of supply – driven by people seeking bigger homes as they work remotely more often after the coronavirus pandemic – the vast majority of surveyors polled by RICS – a net 73% – reported rising house prices, albeit down from a reading of +79% in July.

Other surveys have also pointed to continued house price growth since July when a year-long exemption from the stamp duty tax on house purchases was halved in scale in England and Northern Ireland and expired altogether in Wales. Scotland ended the incentive in April.

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“While momentum has eased relative to an exceptionally strong stretch earlier in the year, there are still many factors likely to drive a solid market going forward,” said RICS economist Tarrant Parsons.

“Given the real shortfall in new listings becoming available of late, there remains strong competition amongst buyers and this is maintaining a significant degree of upward pressure on house prices.”

A significant majority of surveyors – a net 66% – said they expected house prices to rise over the next 12 months, unchanged from July’s reading.

Source: EuroNews

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UK house prices now 30% higher than pre-2008 crisis peak

UK house prices hit a new high in June and are 30% higher than the peak they reached before the 2008 financial crisis, according to the latest snapshot of the market.

The property website Zoopla said the average price of a home was £230,700 – as much as 5.4% higher than the same month a year ago.

It said the sharp increase had come as the number of homes being put on the market for sale had dropped by 25% in the first half of the year compared with the same period in 2020.

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Zoopla also said the demand for houses was more than double that in the years before the pandemic, and that family homes were particularly popular. Supply has failed to keep pace with demand since January 2021, with no sign of an imminent rebalance.

The findings echoed a study published on Monday by a rival property firm, NAEA Propertymark, which said that 40% of UK properties sold in June went for more than the original asking price, as fewer buyers fought for limited available stock.

It noted the 40% figure was the highest on record, although it also said the average number of sales agreed per estate agent branch fell very slightly in June, down from 12 to 11 in May. Last week Rightmove said frenzied buyer activity was driving the market ever higher.

Propertymark’s chief policy adviser, Mark Hayward, said there were typically 19 buyers per available property.

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“We are very firmly still in a strong sellers’ market; properties are being snapped up swiftly and at record high UK house prices. We do anticipate a rebalancing of the market over the coming months as the stamp duty holiday continues to be phased out and people return to normality,” he said.

According to the latest snapshot from Zoopla, Northern Ireland and Wales registered the highest growth of 8.6% and 8.4% respectively over the last year. This represented the highest growth for 16 years in Wales.

The market remained polarised in London, with demand in the capital’s suburban areas 86% higher than the 2017-19 average, while interest in inner London was just 2% higher.

Zoopla said it expected UK house price growth to edge upwards to 6% in the coming months, before easing back to 4-5% towards the end of the year as the impact of extended stamp duty unwinds.

By Miles Brignall

Source: The Guardian

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